Andhra Pradesh government's ambitious plan to develop industrial clusters along the 'Visakhapatnam-Chennai Industrial Corridor' (VCIC) with the help of the Asian Development Bank (ADB) has received the approval of the Union government.

Giving the much-needed impetus to chief minister N Chandrababu Naidu's efforts to transform cities/towns along the corridor into industrial hubs, the Union ministry of commerce and industry, conveyed to the state government its willingness to support the proposal of the AP government for availing of investment loan based on Multi-Tranche Financing Facility (MFF) to a tune of US $900 million from the ADB for the project.

Following the Centre’s in-principle approval of the mega project, the state government is planning to take up the Vizag - Chennai Industrial Corridor Development Programme (VCIC-DP) with an overall investment of US $ 1,000 million by availing MFF loan from the ADB.

The state government has accorded permission to the finance department to submit the proposal to the department of economic affairs (DEA), Government of India (GoI), seeking clearance for ADB's MFF loan of US $ 900 million under the provisions of Fiscal Responsibility and Budget Management (FRBM) Act, 2003. "Of the overall investment of US $ 1,000 million, US $ 200 million is for the policy component and US $ 800 million is for the project investment component. Of the total investment of US $ 1,000 million, AP government's share will be US $ 100 million," a GO issued in this regard stated.

According to the GO, the state government also directed the finance department to simultaneously persuade the Centre for according 'Special Category Status' to AP so that a large percentage of the ADB's MFF loan of US $ 900 million gets converted into grant.

According to the state government, the VCIC is a key part of the planned East Coast Economic Corridor and India's first coastal corridor.